Swadeshi Jagran Manch has written to Shaktikanta Das Governor Reserve Bank of India, saying protection of the beleaguered Lakshmi Vilas Bank could be done without compromising national interests.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The letter from Swadeshi Jagran Manch read, "This refers to the news published in various Media that the Reserve Bank of India has resolved to merge the troubled Lakshmi Vilas Bank with DBS Bank India Ltd., a wholly-owned subsidiary of DBS Singapore. While the Swadeshi Jagran Manch appreciates the intent of the RBI to protect the Depositors` in LVB, we believe the same end could be achieved without compromising national interests." "The proposal is not transparent and it appears to be circumventing RBI`s own practices till now, costing a shadow on the fair name of the Reserve Bank of India." The letter read, "The proposal is for an outright merger of LVB with DBS India. Under this, LVB will cease to exist. DBS India acquires LVB for "zero payment```. In return, DBS takes over LVB "as-is-where-is" including the losses caused by the troubled loans."

"DBS, a foreign entity, gets the 563 branch network of LVB for free, 1000 ATMs, and access to 2 million customers of LVB. This is clearly a back-door entry to a foreign banking entity into the Indian market, overlooking many of RBI`s own in branch expansion of foreign banks," the letter read. Swadeshi Jagran Manch said, "As the RBI knows, the LVB branch network is larger than the branch network of all foreign banks combined in the country. In this day and age where huge sums of money are exchanged for acquiring loss-making operations, just to access customers and physical network and infrastructure, it is surprising that the RBI has chosen to ignore the inherent value in LVB and has announced the handover to a foreign entity for free."

"We hold the RBI in high esteem. We request the RBI to be transparent in this matter and to re-examine the proposed LVB merger with DBS. We are confident that the RBI will find a wholly Indian solution to this issue, protect the interests of depositors and bring LVB back to being the strong community institution that it has always been," it added.
 

The story has been taken from a news agency